Haier's Increased Offer Wins Fisher & Paykel

The Haier Group of China, one of the worlds biggest manufacturers of household appliances, succeeded on Thursday in its bid to acquire Fisher & Paykel Appliances with an improved offer of $NZ927 million New Zealand dollars ($734.6 million).

Haiers new offer of $NZ1.28 a share was enough to convince Fisher & Paykel’s board to endorse the deal after it rejected Haier’s bid of $NZ1.20 a share last month.

The deal is the latest step in a long-running push into foreign markets for Haier, which since 2000 has operated a plant in South Carolina in the United States. Last year, Haier bought Sanyo’s consumer appliance businesses in Japan and Southeast Asia from Panasonic for an undisclosed sum.

In 2009, Haier paid around $US80 million dollars for a 20 per cent stake in Fisher & Paykel. By Thursday, it had secured acceptances of its offer representing more than 50 per cent of all shares, effectively winning majority control of Fisher & Paykel. The remaining shareholders have until Nov. 6 to decide whether to retain their shares or sell to Haier.

Haier, a state-owned company based in the city of Qingdao, failed in a 2005 bid valued at $US1.28 billion for the American company Maytag, but it has grown substantially in recent years. The company reported revenue of 150.9 billion renminbi ($23.2 billion) last year.

It employs around 70,000 people, sells its products in more than 160 markets globally, and has subsidiaries listed on the Hong Kong and Shanghai stock exchanges.

Fisher & Paykel, with more than 3,000 employees, is tiny by comparison. Its revenue fell 7 per cent, to $NZ1.04 billion dollars, in the 12 months ended March 31, its fifth consecutive year of declining sales. Net profit dropped 45 per cent, to $NZ18.4 million dollars.

But Fisher & Paykel also commands a leading position in the Australian and New Zealand markets, and the acquisition gives the Chinese company control of its four plants in New Zealand, Thailand, Mexico and Italy.

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Since Haier first bought a minority stake in Fisher & Paykel three years ago, the New Zealand company has distributed the Chinese firms products in Australia and New Zealand, and earlier this year it began sales in Ireland.

Announcing the original bid last month, the president of Haier’s appliances group, Liang Haishan, pledged to keep the companys development base in New Zealand and to increase employment over time. Mr. Liang occupies one of Haiers two seats on Fisher & Paykel’s board.

"We want the Fisher & Paykel Appliances brand to stay and we will support its growth as a global premium brand, with the additional advantages of operating within the Haier Group," he said.